October 31, 2012

In five years, will Orbitz, Expedia and Travelocity still be around?


That may sound like a nonsensical question. But OTAs are under increasing attack by both the hotel and the airline industry. And if these two forces succeed in tempting away consumers, Priceline, Expedia and the like could quickly become the web equivalent of buggy-whip manufacturers.

The latest salvo in this quiet war comes from the International Air Transport Association, a global trade organization that works with more than 240 of the world’s airlines. It announced, at an Oct. 16 meeting in Abu Dhabi, what it’s calling a “new distribution capability.” What that means: A number of airlines will be experimenting with ways to customize tickets and fees - but ONLY for passengers who book directly on the airline’s website.

“Customers expect to be recognized when they shop online,” said Tony Tyler, CEO and Director General of IATA, in a document released by the organization, summarizing his speech. “And they are used to receiving tailored offerings based on their past purchasing behavior. Airlines are able to participate in this new model with those customers purchasing directly from their websites.”

The new method of selling to consumers will have two parts: first the gathering of information, and then the crafting of deals, according to Tyler. “They the airlines can recognize return visitors and make offers based on travel history, loyalty status, credit-card brand or other metric,” he said.

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